Shares of J.P. Morgan & Co. soared more than 5.5% Monday as investors ventured that the New York banking company might follow Bankers Trust Corp. to the merger altar.
Morgan's stock jumped $6.625, to $115.687. Other bank stocks also gained in a robust session that lifted the blue-chip Dow Jones industrial average to a new high, its first since July.
But analysts were skeptical that the proposed $9 billion deal by Deutsche Bank AG to buy Bankers Trust means that any similar deal involving Morgan is likely, sooner or later.
"There was added takeover speculation in most of the banking and financial stocks today, but common sense was not the market's specialty," said Raphael Soifer of Brown Brothers, Harriman & Co., New York.
"I don't think people were bothering to draw many fine distinctions. Specifically, they ignored the fact that Morgan is a much larger company, around three times the size of Bankers Trust in terms of market capitalization.
"If Deutsche Bank were buying Morgan instead of Bankers for the same premium, it would have to write off about $15 billion of goodwill, instead of just $4 billion," he said.
Moreover, Morgan has given no sign that it might be for sale. Indeed, some analysts suggested the alterations in the competitive landscape likely from the sale of Bankers Trust may make a sale by Morgan less plausible, if it had been possible at all.
A Morgan spokesman said the company had no comment.
"Of course, Bankers Trust also said it wasn't for sale, at least until recently, but I wouldn't really compare the two companies this way," Mr. Soifer said.
On Sept. 30, before the current stock market rally began, Morgan had a market capitalization of $15.2 billion-13th nationally among banks and 56th globally among financial firms-while Bankers Trust had a market valuation of $5.8 billion. Deutsche Bank had a Sept. 30 value of $27.5 billion, ranking 26th in the international financial sector.
Another veteran analyst, Lawrence W. Cohn, research director at Ryan, Beck & Co., Livingston, N.J., said Monday's speculation in shares of Morgan and other companies reflected a general notion that "there are buyers for investment banks out there willing to pay a premium."
"The presumption is that if Bankers Trust went for what it is selling for, then Morgan would go for even more and somebody somewhere must want it," said Mr. Cohn, who quickly added that he was "not arguing that this is rational."
The German banks remain the focus of speculation as potential buyers of investment banks, most notably Dresdner Bank AG, Frankfurt. It had a Sept. 30 market capitalization of $19.1 billion, theoretically giving it a strong level of dealmaking currency.
Swiss banking giant UBS, based in Zurich, is also mentioned as a possible acquirer, with $42.8 billion of market value at the end of the third quarter. However, its recent deals may rule that out for the time being.
In Monday's session, banks generally outpaced other stocks. The Standard & Poors bank index rose 2.4% while the broad market S&P 500 index advanced 2.1%. Nasdaq banks gained a strong 3.3%.
The Dow 30 industrials gained 214.72, or 2.3%, to establish a new record of 9374.27-topping the record of 9337.97 set July 17.